Top Mistakes Investors Make With BRRRR Loans & How to Avoid Them
Small mistakes with BRRRR loans (Buy, Rehab, Rent, Refinance, Repeat) method one of the best wealth-building strategies for real estate investors can lead to major losses if you’re not careful.
Before jumping into your next BRRRR deal, make sure you avoid these common pitfalls and set yourself up for success!
Top Mistakes Investors Make With BRRRR Loans & How to Avoid Them:
Underestimating Rehab Costs – Unexpected repairs always pop up. Add 10-15% to your budget as a buffer. Unexpected expenses, delays, or material price increases, lead to cash flow issues.
Not Accounting for Holding Costs – Mortgage payments, utilities, and property taxes continue even when the home is under renovation. Plan ahead!
Over leveraging the Property – Pulling out too much equity in refinancing may leave you with little-to-no cash flow, making your investment risky if expenses increase.
Refinancing Too Soon – Many lenders require a 3-6 month seasoning period before allowing a cash-out refinance. Make sure you check lender requirements upfront.
Overpaying for the Property – You win on the buy! Running your numbers accurately ensures your After Repair Value (ARV) supports the deal and leaves you enough equity after refinancing.
Neglecting to Check for Zoning or Permit Issues – Buying a property that has unpermitted work or zoning restrictions can delay your rehab, prevent future refinancing, or even lead to costly fines.
Avoiding these mistakes is crucial to keeping your cash flow strong and your investments profitable!
What Smart Investors do for BRRRR Financing
Find lenders that specialize in fast and flexible financing solutions built specifically for BRRRR investors like you. Whether you need a short-term bridge loan for the rehab phase or a long-term DSCR loan to refinance into a rental, work with a lender that has the funding solutions to match your goals.
Find a lender that Understands BRRRR with loan programs structured to fit the BRRRR strategy seamlessly
Quick Closings – Stop waiting around for slow approvals! Work with a lender that moves fast so you don’t lose deals.
Flexible Terms – Whether you need low money down, high leverage, or longer-term financing, work with a lender that’s got you covered.
Are You Ready to Scale Your Portfolio?
The BRRRR strategy only works if your financing is solid—and that’s where a good lender comes in.
Work with a lender that will help you maximize your returns, avoid costly mistakes, and keep scaling your investments faster than ever.